Financial statement ratio analysis apple

Group Member:Ibrahim IkramMuhammad Adil BhattiMuhammad SulemanTauqeer Ahmed

Executive Summery

The Past – Steve Jobs, Steve Wozniak and Ronald Wayne established Apple on April 1,

1976 in order to sell the Apple 1 Computer Kit that was hand built by Steve Wozniak. The

Apple 1 was sold as a motherboard (with CPU, RAM and basic textual video chips) – less

than what is considered a personal computer today.

The Present – January 2007, Steve Jobs, the CEO and Co-Founder of Apple,

announces that Apple Computer Incorporated would now be known as Apple Inc.

In June 2008, he announces that the iPhone 3G would be released in July 2008, this

newer version added support for 3G Networking and assisted GPS navigation,

among other things.

The Future – Apple plans on focusing on satisfying personal consumer demands rather

than merely fulfilling a demographic requirement as well as, improving performance

and stability rather than introducing new features when releasing new versions of any

product.

The iPhone- targets consumers who need to store information and communicate or

people who want entertainment on the go. Currently, the market for high-end phones

like the Apple I Phone is small.

Executive Summery

COMPANY PROFILE:Apple Inc designs, manufactures and markets a range of personalcomputers, mobile communication and media devices, and portable digital musicplayers

Vis

ion

Mis

sio

nL

ea

din

g

Pr

od

uc

ts

“To be a leader in providing simple, powerful, high-quality information products and services for people who learn, communicate, and create”

“Our mission is to bring the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings”

Mac iPod iPhone iPadApple

TV

Apple organization hierarchy:

Balance sheet of asset:

Balance sheet of Liabilities:

Income statement:

Next Member:

o21334022

Liquidity Ratios:Current ratio

In 2013 Current Assets 73,286/43,658= 1.67

Current Liabilities

Interpretation:Measures ability to meet current debts with it current assets.

In 2012 = 1.49611

=

In 201373,286- (1,764)

43,658

In 2012 = 1.24825

Current Assets - Inv

Current Liabilities

Acid-Test (Quick)

= 1.63

Interpretation:Measures ability to meet current liabilities with most liquid current asset.

=

Financial Leverage RatiosDebt-to-Equity

In 2013Total Debt

Shareholders’ Equity$16,960, = = 0.13 $123,549

Total Debt

Shareholders’ Equity= 0.00

In 2012

Interpretation:Indicates the extent to which debt financing is used relative to equity financing.

Debt-to-Total-Assets

Total Debt

Total Assets=

$16,960

$207,000 = o.o8

In 2012 = 0.00

In 2013

Interpretation:Shows the relative extent to which the firm is using borrowing money.

Total Capitalization

Total Debt

Total Capitalization= $16,960,000

$140509000

In 2012 = 0.00

In 2013

= 0.12

Interpretation:Shows the relative importance of long-term debt to the long-

term financing of the firm.

Coverage RatiosInterest Coverage

EBIT

Interest Charges

$50,155

$136 = = 368.7 time

In 2012 = $55,763

In 2013

Interpretation:Indicate ability to cover interest charges tell number of times interest is earned.

Activity RatiosReceivable Turnover

Annual Net Credit Sales

Receivables $1,949,000= 5.5time$10,830,000

In 2012= 2.1 time

In 2013

Interpretation:Measures how many times a receivable have been turnoverinto cash during the year provide insight into quality of thereceivable.

=

Average Collection Period

Days in the YearReceivable Turnover

365=

5.5= 66 Days

Interpretation:Measures how many times the receivable have beenturnover into cash during the year provide insight intoquality of the receivable.

In 2013

In 2012= 173 Days

Next Member:

o21334062

Inventory TurnoverIn 2013

Cost of Goods Sold

Inventory

106,606000

1,764000= = 60

In 2012 = 50

Interpretation:measures how many times the inventory has been turned over (sold) during the year; provides insight into liquidity of inventory and tendency to overstock

Average collection

• Collection average for 2012=7.3

• Collection average for 2013= days

inventory turnover ratio

60

Interpretation: measures relative efficiency of total assets to generate sale

365

= 6.0

Total Assets Turnover Ratio

• Total assets turnover ratio for 2012 =

• Total assets turnover ratio for 2013 = net sales

total assets

20,7000

Interpretation:

measures relative efficiency of total assets to generate sale.

26.67

$170,910,00=

=52.3

Average collection

• Average collection for 2012 = 13.6

• Average collection for 2013 = Days

total asset turnover ratio

365

52.3=6.97

Interpretation:

measures relative efficiency of total assets to generate sale.

Profitability Ratio

• Profitability ratio:

• Net profit margin for 2012 = 4.1

• Net profit margin for 2013 = Net profit after taxes

Net sales

Interpretation: : measure profitability with respect to sales generated net income per dollar of sales

$37,037= = 2.1 $170,91

Return on investment

• Return on investment in 2012= 0.2

• Return on investment in 2013= Net profit after taxes

total assets

Interpretation: measures overall effectiveness in generating profits with which available assets earning power of invested capital

$37,037,000

$207,000,000

=0.1

=

Return on Equity

• Return on equity in 2012=0.35

• Return on equity in 2013= Net profit after taxes

share holder’s equity

$37,037,000

$19,764,000 = 1.8

Interpretation:measures earning power on shareholder’s book-value investment.

Du Pont approach

• Du Pont approach for 2012 = 1o9.3

• Du Pont approach for 2013 = net profit margin*total asset turnover ratio

3.4*52.3 = 177.82

Next Member:

o21334014

Common size Analysis:Apple Inc., Common-Size Consolidated Statement of

Financial Position, Assets

Sep 28, 2013 Sep 29, 2012 Sep 24, 2011 Sep 25, 2010 Sep 26, 2009 Sep 27, 2008

Cash and cash

equivalents 6.89% 6.10% 8.43% 14.98% 9.77% 30.01%

Short-term

marketable

securities 12.70% 10.44% 13.87% 19.10% 33.80% 31.88%

Accounts

receivable, less

allowances 6.33% 6.21% 4.61% 7.33% 6.24% 6.12%

Inventories 0.85% 0.45% 0.67% 1.40% 0.84% 1.29%

Deferred tax

assets 1.67% 1.47% 1.73% 2.18% 3.90% 3.66%

Vendor non-

trade

receivables 3.64% 4.41% 5.45% 5.87% 3.15% 5.77%

Other current

assets 3.32% 3.67% 3.89% 4.58% 9.63% 8.95%

Current assets 35.40% 32.75% 38.66% 55.44% 67.34% 87.66%

Long-term

marketable

securities 51.31% 52.32% 47.79% 33.77% 19.55% –

Property, plant

and equipment,

net 8.02% 8.78% 6.68% 6.34% 5.49% 6.20%

Goodwill 0.76% 0.64% 0.77% 0.99% 0.38% 0.52%

Acquired

intangible

assets, net 2.02% 2.40% 3.04% 0.45% 0.46% 0.72%

Other assets 2.49% 3.11% 3.06% 3.01% 6.78% 4.89%

Non-current

assets 64.60% 67.25% 61.34% 44.56% 32.66% 12.34%

Total assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Common size Analysis (cont):

Accounts Payable 12.57 12.03 10.81 9.18

Short-Term Debt — — — —

Taxes Payable 0.98 0.87 0.58 1.05

Accrued Liabilities 6.97 4.76 2.52 3.28

Other Short-Term Liabilities 3.52 4.23 7.19 7.47

Total Current Liabilities 24.04 21.89 21.09 20.98

Long-Term Debt — _ 8.19 8.23

Other Long-Term Liabilities 10.13 10.97 11.03 12.45

Total Liabilities 34.16 32.86 40.31 41.66

Total Stockholders' Equity 67.14 59.69 58.34 65.84

Total Liabilities & Equity 100.00 100.00 100.00 100.00

Apple Inc., Common-Size Consolidated Statement of Financial Position, liabilities

Sep 28, 2010 Sep 29, 2011 Sep 24, 2012 Sep 25, 2013

Index analysisparticulars Current year of

2013/base year of

2011*100

Amount Current year of 2012/

base year of 2011*100

Amount

Property, plant and

equipment of 2013, 21012/

property, plant and

equipment of 2011 *100

16,597

7,777*100

=213.41 15,452 *100

7777

=198.68

Current assets of

2013,2012/ current assets

of 2011*100

73,286

57,653*100

=127.11 44,9881,

57,653*100

=780

Total assets of 2013, 2012/

total assets of 2011*100 $207,000

116,371 *100

=177.87 1,767,168

116,371 *100

=1.518

Share capital-ordinary of

2013,2012/ share capital-

ordinary of 2011*100

61,576

61,576*100

=100 61,576

61,576*100

=100

Reserves of 2013,2012/

reserves of 2011*100

388,153

420,085*100 =92.39

534,202

420,085*100 =127.16

Non-current liabilities of

2013,2012/ non-current

liabilities of 2011*100

43,658

10,100*100

=432.25 16,664

10,100*100

=16.47

Current liabilities of

2013,2012/ current

liabilities of 2011*100

43,658

27,970*100

=156.08 38,542

27,970*100

=381.60

Total liabilities of

2013,2012/ total liabilities

of 2011*100

83,451

39,756*100

=209.90 57,854

39,756*100

=145.52

Total shareholders’equity2013,2012/ Total shareholders’equity2011*100

123,549

76,615*100

=161.25 118,210

76,615*100

=154.29

Thanks You

`